Ivan Tornos, Zimmer Biomet’s former chief operating officer, was named CEO on Tuesday as former Chief Executive Bryan Hanson left to lead 3M’s healthcare spinoff. Despite Hanson’s “abrupt” and “unexpected” departure, analysts said they expect little to change at the orthopedic device maker and for Tornos to build on the company’s current strategy.
Hanson, who joined Zimmer Biomet in 2017, was tasked with turning around the Warsaw, Indiana-based company as it struggled with quality control and supply chain problems. It has improved “both operationally and financially” in the years since then, BTIG analyst Ryan Zimmerman wrote in a research note on Tuesday.
Although investors may question why the CEO left Zimmer Biomet for the 3M spinoff, which is similar in size, “it seems as though Mr. Hanson was nearing the end of his time in what he wanted to accomplish at [Zimmer Biomet],” Zimmerman said.
Tornos, who has been COO since 2021, is expected to build on Hanson’s legacy. Stifel analyst Rick Wise wrote that he believes Tornos and CFO Suketu Upadhyay will “take Zimmer Biomet to the next level of performance.”
In conversations with analysts, Tornos outlined his priorities as CEO of the company. Zimmer Biomet remains on the lookout for small- to mid-sized acquisitions and is largely focused on orthopedic markets where it can be the No. 1 or No. 2 player, RBC Capital Markets analyst Shagun Singh wrote in a research note. Tornos also highlighted margin expansion as a priority, naming Upadhyay — whose role now includes overseeing the company’s operations and supply chain — as a key part of this strategy.
Investing in new products, employee engagement and stability are additional priorities for the new CEO, who said he plans to keep most of the company as it is, Singh wrote.
Zimmer Biomet, which reported $1.87 billion in revenue during the second quarter, reiterated its forecast of 6.5% to 7.0% revenue growth in 2023 with the CEO announcement.
